• SPP Files New "Highway-Byway" Transmission Cost Allocation Methodology
  • May 6, 2010 | Authors: William "Bill" R. Derasmo; Kevin C. Fitzgerald; Peter S. Glaser
  • Law Firm: Troutman Sanders LLP - Washington Office
  • On April 19, 2010, the Southwestern Power Pool, Inc. (“SPP”) filed proposed revisions to its Open Access Transmission Tariff (“OATT”) to include a new transmission upgrade cost allocation method called the “Highway/Byway” method, which moves away from allocating costs on a zonal basis to a broader SPP-wide basis.

    As a regional transmission organization, SPP administers transmission service in portions of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma and Texas.  SPP’s OATT currently provides that 1/3 of costs for Network Upgrades are allocated on a postage-stamp basis across the SPP Region, and the remaining two-thirds are allocated to the pricing Zones within SPP based on each Zone’s share of the incremental positive megawatt-mile benefits.

    The Highway/Byway method will allocate costs for future transmission facilities based on the voltage level of the specific facility:

    • “Electric Highways” (high voltage transmission 300 kV and above)— 100% of the costs will be allocated  to electric utilities’ load across SPP’s entire system based on their historic use of the region’s transmission system;
    • “Electric Byways” (lower voltage transmission projects above100 kV and below 300 kV)—1/3 of the costs will be allocated across the entire SPP region and 2/3 will be allocated to the utilities in whose zone the project is located; and
    • “Electric Byways” (100 kV and below)—100% of the costs will be allocated to the utilities in whose zone the project is located.

    SPP asked that the OATT revisions become effective on June 19, 2010.

    A copy of SPP’s filing can be found at http://www.spp.org/publications/Highway%20Byway%20Filing.pdf